As global economists continue to forecast that the United States is likely heading into recession, one Alaska pollock executive does not see demand diminishing anytime soon for what he describes as the "value species within the whitefish world."
"Looking at this from a wild Alaska pollock perspective, we are well-positioned to do quite well even with some of the warning signs on the horizons," Rasmus Sorensen, executive vice president of global sales at American Seafoods, told the audience at last week's North Atlantic Seafood Forum.
"People tend to trade down when finances are tight."
American Seafoods is a major player in the Alaska pollock fishery, with six catcher-processors that annually harvest 350,000 metric tons of both pollock and hake.
Right now the company, along with much of the rest of the US Alaska pollock industry, is seeing prices at record highs, even though Russia's war on Ukraine as well as inflation weigh heavily on consumers.
That's largely because wild Alaska pollock is seen by buyers as a "value" species, with the product increasingly replacing whitefish staples such as cod in Europe in recent years.
UK cod sales have dropped by 11 percent in volume in the last year alone, partly as a result of the unraveling of COVID lockdowns in 2021, but in general because cod's performance is worse than other species.
And while Alaska pollock producers have ramped up their deepskin and pinbone-out (PBO) production over the last few years, Sorensen explained that "inventory levels are low" for all core products, as Alaska pollock increasingly replaces "expensive alternatives" both in the United States and globally.
The issue of a tight supply has even been evident for the biggest domestic buyers of Alaska pollock, he said.
Last year, the USDA could not award the total amount of its contracts to seafood companies due to "vendor constraints," as it navigated a pollock "B" season that did not have the right size fish to produce fillets for the highest-value customers.
This year, the agency has spent over $31 million (€29.4 million) so far on Alaska pollock bids, with a few more likely on their way, data from Sorensen showed.
But the tight inventory issue is not new to Alaska pollock and has been around since 2014, when demand for core products started rising globally.
Sorensen pointed to the most recent EU import numbers for Alaska pollock as an example, which have fallen around 11 percent to around 99,000 metric tons since 2019.
This "is not a reflection of lower demand, this is a reflection of trouble in the supply chain," he said.
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